Money for old hope: considering an aging workforce when buying a business

The UK’s workforce is aging, with even the most conservative estimates forecasting that in 2020, people aged 50 and over will comprise a third of the country’s working age population.

There are a number of factors that all feed into this change, including vastly extended life expectancies, an ever-rising state pension age and the fact that the baby boomer generation has finally reached retirement age.

Making the most of these older employees is key to the health of the British economy, say experts, to avoid the creation of a stark “skill gap” where younger workers will not have the expertise to be able to replace those leaving the workforce.

In light of this, earlier this year a government task force spearheaded by Andy Briggs, a senior Aviva executive and insurance industry veteran, set out plans for companies to employ an extra one million people in the older age bracket by 2022.

Briggs called on every British firm to employ 12 per cent more staff aged between 50 and 69 over the next five years, a move which, he says, will boost older workers’ numbers from 9 to 10 million and swell the UK’s GDP by 5 per cent, or some £88 billion.

The tide is already shifting in this direction, anyway: a survey published by another insurer, Axa PPP Healthcare, found that a third of companies are offering flexible or shorter working hours and phased retirement plans to aid their employees, as well as increasingly comprehensive healthcare insurance.

When buying a business, these factors could well come to bear on how the resulting company will function, particularly if the acquisition is part of a merger.

If buying a business as a stand-alone, one pressing issue - or prejudice - is the idea that older people are less tech-savvy than younger employees. We can all imagine the bumbling, out-of-touch older person who can barely send an email, let alone understand the company’s CRM system.

Well, according to a Dropbox survey of 4,000 IT workers, this could not be further from the truth. The cloud platform found that only 13 per cent of respondents aged 55 or older reported trouble working with multiple tech devices, compared to 37 per cent of 18-to-34-year olds. The survey found that, on average, people 55 and up used 4.9 forms of technology per week, compared to the overall average of 4.7 per week

On the subject of disproving these preconceptions, there also is little evidence that older workers are at a higher risk of occupational accidents or of taking sick days according to Axa’s survey. Recovery from illness, injury or tiredness may be a factor however, particularly for those businesses that require a high level of physical activity.

Nevertheless, when it comes to a merger, a clash of cultures can be one of the first problems to overcome. With many companies embracing the advantages and expertise offered by an older workforce, squaring workplace philosophies with another firm with, for example, a far younger, start-up oriented culture could be tricky.

Some of these differences could include how performance is rewarded, how risk is perceived and general management style. These must be identified and managed early on during integration to avoid any issues.

Team days out, workshops and similar events can help even out these differences - just steer clear of any extreme sports!

In an ideal world the age and make-up of both companies’ workforces will be well accounted for in preparation of the post merger integration (PMI) process, with strategic and tactical choices outlined for the direction of the new, merged company in advance.

A more aged workforce are more likely to be more experienced, patient and skilled than younger workers, giving you valuable new options for how to staff your firm and giving business owners the option to have older workers mentor younger ones and pass valuable skills on, or indeed vice versa.

Integrating a new company into the fold is far more likely to succeed if the right people are assigned to the right roles and activities: more experienced heads can not only fill these roles but help give invaluable advice.

If there is a cultural or skill-based mismatch in a newly merged company, staff may need further training on these topics, particularly from a HR and discrimination point of view.

Age discrimination is, of course, illegal: employers cannot dismiss someone on the grounds of retirement or force them to retire, for example. Any harassment, victimisation or special treatment related to a worker’s age is something that needs to be accounted for, particularly if the composition of your workforce changes after an acquisition.

Retirement age is a sticky subject, but business owners are unable to set an age “unless it can be objectively justified”, writes Acas in its guidance, such as roles where a high level of physical fitness might be necessary, such as in the emergency services.

Otherwise workers are permitted to retire voluntarily. Other benefits older workers are still entitled to include parental leave, time off for dependents and flexible working after 26 weeks in the job, as are any employees.

Squaring these differences is vital to a firm’s continued success, but can also bring with it unanticipated advantages.

For example, telecoms firm BT recently overhauled many of its HR policies to be age-neutral, including abolishing a retirement age of 60 (so long as there is a role for the employee and their health and performance are satisfactory) and lifting age restrictions on its corporate graduate scheme.

Dennis Gissing, head of diversity practice at BT, says that changes have reinforced that staffing opportunities are open to anyone, regardless of age, and that they are currently training a graduate aged 50.

He adds: “We’ve found that, as our organisation has aged, we’ve not become less efficient, but have retained a lot of knowledge and experience. All that has happened is that our age demographic has changed in line with the working population.”

Gissing also extolls the virtue of more closely aligning his company’s employee base and customer base.

He adds: “The better we understand the communities we work with, the better able we are to deliver what they need, and understand the issues.”

This underlines one of the key advantages that comes with an “age rich” workforce: the diversity of skills, thoughts and experiences that comes with an employee base who encompass a wider sample of the population.

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